MBTA’s parking lot operator sues transit agency

Lawsuit raises questions about loss of money at Haymarket Garage

THE PRIVATE COMPANY hired to operate the MBTA’s 101 parking facilities is suing the transit agency for failing to comply with the terms of the contract, which requires the payment of as much as $2 million a year in bonus compensation for meeting key performance targets.

Republic Parking of Chattanooga, Tennessee, said in its lawsuit that the MBTA has refused to even establish the performance targets on which the bonus payments would be made.

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The lawsuit also raises questions about the veracity of comments the MBTA previously made about the loss of parking revenue at the T’s Haymarket Garage. In June 2017, roughly two months after Republic was hired, CommonWealth learned that a substantial amount of money had been lost at the Haymarket Garage. The T responded to inquiries about the losses by saying an incorrect computer setting at the garage resulted in $41,000 in credit card payments going uncollected over a period of 14 days in late May and early June. The T said Republic had agreed to eat the loss and reimburse the transit agency for the lost funds.

In its lawsuit, Republic said it had discovered that the T’s previous parking contractor, LAZ Parking, “had neglected to bill $430,000 annually at the Haymarket Garage for validations and monthly tickets.” Republic said it rectified the problem, increasing parking revenues by a corresponding amount.

The MBTA hasn’t had a strong working relationship with its parking lot vendor for some time. LAZ’s contract was terminated in March 2017 after the MBTA sued the company for failing to prevent employees from skimming millions of dollars from T parking facilities. LAZ ultimately settled the lawsuit by agreeing to settlements with the MBTA (for $4.5 million) and Attorney General Maura Healey (for $1.4 million).

Now Republic is suing the MBTA, alleging the transit authority is violating the terms of the contract. The contract calls for Republic to be paid a flat annual fee of $9.1 million to manage and maintain the T’s 10 garages and 91 surface lots. Republic is also eligible for reimbursement of “reasonable and allowable expenses” and a “performance bonus determined semi-annually on the basis of the contractor’s ability to meet and exceed well-defined key performance indicators,” according to the contract terms. The bonus pool cannot exceed $2 million.

“Contrary to the provisions of the agreement, the MBTA has not, to this date, provided [Republic] with any bonus compensation. The MBTA has not established the amount of monies to include in the performance bonus pool at the outset of any evaluation period. Indeed, the MBTA has consistently refused to provide any KPI-based compensation despite their clear obligation to do so according to the agreement,” the lawsuit said.

Republic “formulated its bid in reliance upon this framework, fully expecting to delivery high quality service and solid financial results worthy of a bonus commensurate with their performance,” the lawsuit said.

Much of the complaint is devoted to detailing ways in which Republic has provided bonus-worthy performance, including a sharp increase in parking revenues, a reduction in operating expenses, and a 100,000 increase in parking violation notices.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The lawsuit comes at a time when the MBTA is struggling to achieve its targets for parking revenues. Through the first six months of this year, MBTA parking revenues were down $1 million from year-ago levels and $6 million off budget targets. The lawsuit, filed in Suffolk Superior Court, does not seek specific monetary damages.

An MBTA spokesman declined comment, saying “it is the MBTA’s practice not to comment on pending litigation.”